Introduction
Just a little more than a hundred years ago there were one and a half billion people on this planet. Today, there are more than six billion (Arthur & Shefrin, 2003). There has been a revolution in the way food is produced. Pesticides have grown our ability to produce food but studies have shown their peril to human health (Arthur & Shefrin, 2003).
Nowadays there is a turn into new technologies that could offer new solutions to the food problem in a healthier way. That is what our company, GeneOne is all about. It has developed, and still is developing; new technologies that can offer new bioproducts that eliminate the need for pesticides. Thus, it is offering a new category of bio-products. But when it comes to competing in the present market GeneOne, is in a seriously difficult situation.
As a business, it should take dear the benefiting of its stakeholders. But we must not forget that the mission of a business is, after all, to increase profits (Arthur & Shefrin, 2003). This means it has to serve particularly a certain group of its stakeholders; its share or stockholders. At the same time, it has a social responsibility part that it cannot forget. Its loyalty to its actual workforce is one of those aspects that a good company cannot allow losing. At the same time, in this global market place competition is growing fiercer and the need to improve professionally and cut costs is immediate if you want to “survive the tide” (Arthur & Shefrin, 2003).
Situation Analysis
Issue and Opportunity Identification
The issue at hand regards a very particular situation. The biotechnological industry has been growing fast during the last two decades. It is a particular issue because it deals directly with the quality of life, with the health, of every individual in society. In fact, what we eat affects us positively or negatively during our daily lives. Nutrition is a basic feature of human beings. As a result of the industrial revolution and the boom in population that this planet has had during the last one and a half centuries, new ways of producing food have been used. The company we are analyzing here, GeneOne, wants to re-revolutionize this area once again by introducing pesticide-free modes of food production that will benefit the health of the consumers.
There are several particular issues for GeneOne to be considered before becoming a public company. First, it has to strengthen relations with the general public, the consumer, since the products it is dealing with influence directly on consumer’s health. A company has to earn public confidence because “building a positive image since the start of the company, or using the previous positive perception that the public may already have on other products you have launched before, will help the companies gain a strong market share position” (Gomez-Mejia et al, 2006, pg. 7).
GeneOne has to enter a new market in a new form. The marketing strategy it will choose, along with all the other elements mentioned above, will determine its image and brand recognition among consumers.
A company needs to kick-start the best way it can in the market so it can gain the biggest possible market share.
GeneOne can utilize all its previous positive brand names but it must also be cautious not to repeat the same mistakes others in the industry have done before it.
Another issue is that of the correct leadership for the company.
“Having the right leadership with the correct integrity means attracting more money for your company.” (Miller, 2005, pg. 4)
In order for GeneOne to go public, it has to impress Wall Street. By this is meant that it has to attract investors that will invest their money in the company. The first thing that investors are going to see is the leadership of that company. If the leadership is well known as having a high level of integrity and a good public figure then it is a plus in attracting investors because they “believe” in the business sense of the leadership.
But if the leadership, for example, board executive members of GeneOne, has not had a very positive reputation this might make investors worry about investing their money in this company, thus damaging the company’s liquidity. In our case, the fact that Teri won the CTO of the year title is an advantage that shows leadership integrity that will encourage investors to put their money in GeneOne.
Yet a third issue would be that of management-labor force relations. It well proceeds now that a company’s productivity and the image is not only related to its branding, its products, or leadership but also on how it treats and evaluates its workforce (Simon, 2006, pg. 4).
If the workforce is motivated the productivity of the company will boost. But when a plan that can, or will, affect the workforce is deployed it is better to communicate with them in order to have their feedback. In our case, the IPO plan of GeneOne will affect the workforce negatively. There might be cuts or wage reductions at the beginning due to the changing of the company by going public. Thus, it is important, as Greg points out, to communicate with the workforce and develop strategies that will retain the above medium workforce morale and will minimize the negative effects that this can have on the company’s productivity.
Stakeholder Perspectives/Ethical Dilemmas
The stakeholder’s prime interest is that the company maximizes its revenue and diminishes its total costs. This way the company will increase the net profits which will, in turn, result in more profits for the shareholders. There may be additional values that shareholders take dear but the above mentioned is, in my belief, more important. This is due to the fact that they have invested their money in a business profit company for the reason of gaining profits. They expect the company to return their initial investment as soon as possible and then pass to the stage of gaining profits. And that is one of the major ethical dilemmas that we find in the business world today: how to increase profits without “moving away” from the so-called social responsibility part of the business?!
GeneOne is a company that deals with nutrition and can affect the health of people directly. If an “only-for-profit” tendency is shown then consumers would negatively react to it.
This situation would damage the branding name of the company and public perception of it. The results will be that revenues, and subsequently profits, will decrease. As a result, investors would be afraid of putting their money into this company and this would result in a lack of liquidity that will ruin the company.
A second group to be considered is the workforce, labor force, of the company. They have their interest too in this respect. In the company has to go through a process of reformation, so too must the workforce. As it comes out from the management team discussion, there will be cuts in the number of workforce and cuts in wages and benefits for them, at least in the first stages when the company becomes public.
But when a plan that can, or will, affect the workforce is deployed it is better to communicate with them in order to have their feedback. In our case, the IPO plan of GeneOne will affect the workforce negatively. There might be cuts or wage reductions at the beginning due to the changing of the company by going public. Thus, it is important, as Greg points out, to communicate with the workforce and develop strategies that will retain the above medium workforce morale and will minimize the negative effects that this can have on the company’s productivity.
The workforce regards this strategy as unfair and unethical that violates the interests and rights of the present workers (Dyrud, 2002).
In itself, the strategy has a probability of functioning as the team expects but it also has the risk probability of having back-clashes that can further damage the company’s actual market position.
For example, the team takes the risk of implementing this strategy and you find that it might be hazardous. How do you increase profits with a non-motivated workforce and a bad public relations and brand image?
On the other hand, the implementation of this risk-based strategy can create opportunities in the immediate future. It can open new market segments and increase customer satisfaction because of the increase in high-quality related products and services.
And there comes the ethical dilemma once again: shareholder satisfaction on expenses of another group of stakeholders (the workforce) or maintain a satisfied workforce at the expenses of fewer profits for the investors? Surely it is a dilemma where there can be no loss because somebody has to “give up” on something in order to remain competitive in the market.
Last, but not least, are the consumers. They too are stakeholders in this enterprise. Ultimately they are going to the consumer the products of GeneOne. And here their interest is not only in having high-quality products that are certified to be healthy and have no collateral negative impact on them. Their interest is also to have a product at an affordable price and not out of the reach.
Problem Statement
GeneOne intends to become a worldwide leader in the biotechnology sector and a respected competitor in the bio-industry market. Its goal is to offer to the general public, to the consumers, a healthy and high-quality product; a product that can be acceptable by many groups within society in terms of cost. It also aims at having the best treatment and relationship with its workforce and makes sure that investors are satisfied with the trust they put into this company.
GeneOne’s vision is to enhance the company’s market value and profits for the benefit of its shareholders.
At the same time, retain its socially responsible approach toward its staff and workforce along with a high-quality service for its customers.
In order to achieve these objectives, the necessary management and operation plans should be made to make the correct steps toward the realization of the plan.
End-State Vision
The “conflict” in GeneOne is an “ethical crisis” regarding the transformation that the company should undertake in order to become a public ownership business. It can be beautifully expressed by the words of Angela Thomas, Vice Presidents for the Technology Research Department. In her letter of resignation, she points out that “Last week’s Money item really made me think about what the IPO is about. My passion centers around doing pure and applied research, not pleasing Wall Street. I just don’t have the energy or desire to push myself to deliver new technologies on a schedule; that’s not the way breakthrough technologies happen.”
The pressure of becoming attractive to investors in order to have the necessary capital flow to enter the market as strong as possible has led GeneOne to put enormous stress on some of its management team members to reach certain objectives within very short deadlines. The same is also done with the workforce, lowering their morale by announcing the cut wage and benefit reforms to be done because of the implementation of the plan to become a public company.
The end state solution will depend on the cooperation of these long-time partners, management team, and workforce, and their mutual agreements of the ways to proceed.
Angela’s point of view informs us that having the right technology that will deliver the high-quality product required needs its appropriate timing. If the customer, the public health, is also the focus, the company cannot rush upon its deadlines and by doing so increases the risk of the problems that could arise. In short periods, the technology cannot be tested adequately and this would result in a dubious quality product.
On the other hand, we have the point of view of investors who want assurances of the stability of the company and innovative breakthroughs that will ensure a good market position. This good market position would be a guarantee for investors that their initial investment will return as soon as possible and their profits would be attractable.
The end-state solution will depend on the achievement of a non-conflict position between these two different viewpoints.
An end-state solution with taking into account that the company has to go public and introduce in short timing new technology-based bioproducts in the market would not be the adequate solution. It would be a solution that would increase the risk of losing its objectives, both fewer profits for that part of the stakeholder community interested in increasing profits and revenues, fewer jobs for the workforce community, and lower quality for consumers.
Alternative Solutions
Alternative solutions that prolong the partnership between the management team, workforce, investors and customers, should be found and implemented. In order to benefit, GeneOne should offer its actual working force the possibility to save its position in the company. An opportunity to increase the qualification level by arranging the training for them can be provided as a response to the new requirements coming from the IPO plan implementation. For example, the company can make positive recommendations for those who would refuse to work further for GeneOne, and allow them to find other workplaces of other related companies. This way the company will be seen as trying to help its workers even if it cannot keep them at their actual workplace.
This action would improve the reputation of the company and leave a good impression of its actual workforce.
This situation would be very helpful because it will retain high morale within the workforce. If the future vision of the company should be of a company that has gained a considerable market share and positioning in confront to the competition, then the workforce can play a significant role in it, both positive and negative. With high morale among the workforce and the appropriate management leadership, GeneOne will become a leader in the biotechnology and bioproducts industry by remaining committed to its philosophy of treating the workforce as a “family”.
Analysis of Alternative Solutions
If the actual plan is left apart and efforts are put to draft another plan then it can have some negative effects also other than positive. The positive effects are that the clashing view with the workforce and members of the management team will terminate and the company will retain a positive public relation stance before the public. But the negative effect would be that this may be not the correct solution to the problem. In the not too distant future due to competition, the company could lose a significant part of its market share, consequently its profits. This will lead to a deepening of the problems it is facing now.
It will also make investors dubious about the future of the company and they will be less willing to put their trust and money into this enterprise.
To continue with the actual plan could result in a bad public image for the company. This is due to the fact that GeneOne has made an image of its good treatment of its workers. The outsourcing part of the IPO plan could damage that image. The result would be fewer customers in the future.
This is why they need to find alternative solutions, like the one proposed above, for their workforce and their team members. Offering the workforce the possibility to keep their position, through professional training for example, and the management team members to express freely their creative geniuses, would ultimately benefit the company.
They should also, send a “message” to the investor that they intend to be a serious company that works for both the benefit of itself, its customers, and its investors, shareholders.
Risk Assessment and Mitigation Techniques
The risks of implementing the IPO plan as it stands would result in public image damage and a “brain flow” from the management team. In fact, this last has already begun happening with various management team members resigning or threatening to do so, because of the stress put on them from the IPO plan.
Subsequently, this may be not the correct solution to the problem. In the not too distant future due to competition, the company could lose a significant part of its market share, consequently its profits. This will lead to a deepening of the problems it is facing now. The probability that this plan functions on solving the problems of the company is low. There is also a high probability that this
To continue with the actual plan could result in a bad image before the shareholders of the company. This is due to the fact that GeneOne has made an image of its good treatment of its workers. This outsourcing plan could damage that image and result in fewer customers in the future. It is a very high risk of harming the market share of the company and, especially, there is a high probability to damage the public image and good brand name it has created over the years.
Investors surely are very sensitive to the internal problems of a company because they know this affects the external relations that the company has with the consumers.
I also believe that putting timing (deadline) pressure on creative management team members would ultimately “scare” investors because a company with fewer professionals would not go far in the market.
Optimal Solution
Well, what would be the optimal solution then? Of course, if there is one. According to what I have mentioned above in the alternative solution section, the optimal solution would be a combination of the following:
- Offering opportunities to the actual workforce without abandoning the intention of going public. This would retain high morale among the workforce that would, in turn, result in better performance by them for the implementation of the plan.
- Offering to the creative members of the management team the possibility to express their creative genius in developing new biotechnologies, ideas, and bio-products without short deadlines. But, of course, there should be a deadline to be met. It is best to find the middle solution between a short and a long deadline. This would both make them feel comfortable and responsible.
- Take the message out to the investor world that this company has the intention to become a leader in the proper market in the nearby future. This company has a high morale workforce and a group of motivated young talented, creative people who are willing to work hard in achieving these results. Ultimately this company has a plan to be implemented and all investors are welcomed.
Take the message to the customers about the new biotechnology to be created and the subsequent products from it.
Implementation Plan
More or less the optimal solution gives an idea of the steps to be implemented.
First, the company will offer to its actual working force the possibility of enhancing their professional capabilities. The first phase of the implementation of the plan will be directed to the actual workforce. This enhancement of professional capabilities is necessary for the conditions of global market competition. The Human Resources and Public Relations Department of the GeneOne, headed by Greg Thomas, will be in charge of organizing this training and provide all the requirements for the training sessions.
Also, it should be made clear to the workforce that improvement of their professional skills for the usage of new sophisticated biotechnology is “a must”. The training will have a grading point and all the workers that will not have a certain grading point average, or above, will not be able to continue their work at the company. With these moves the company will re-establish good relationships with the workforce and avoid all the negative publicity and the situation that can be created in the public.
The period for preparing the training and beginning their implementation will be three months. In addition (as mentioned above), for that part of the working force that will not accept to continue their training, or that will not meet the minimal passing requirements at the end of the training, the Global Communication can release positive references and recommend them to local partner companies. If the Public Relations Department may intermediate with local partner companies to achieve these results. This will be done for these workers to find another adequate job to fulfill their daily life needs. This is also the second phase of the implementation of the plan. It will comprise one to two other months for the Public Relations Department to help these workers find an adequate placement in other companies.
Meanwhile, there should be “special treatment” of the creative management team members as mentioned in the optimal solution above. This phase along with the above mentioned shall be monitored by Human Resource Department represented by Greg Thomas.
The last phase will be that of “taking the message out” to investors and customers for the changes that the company will undertake and its ambitions to become an IPO business. The timeline for this phase will be three months. These will be the same period when the Public Relations Department will implement the first and beginning of the second phases. Instead, this phase will be directed by the Marketing Department headed by Charles Jones.
Evaluation of Results
The results should be evaluated with measures that are specific, measurable, attainable, realistic, and timely. If this is done correctly then we can have a correct evaluation (Chlondowski, 2007).
The number of the actual workforce that decides to pursue the training offered by the company is a specific measure of the implementation of the first phase of the plan by the Human Resources. This along with the other measure of the number of workers that are going to relocate work in other local partner companies within the first five to six months from the beginning of the implementation of the plan. These two are also measurable measures because the company can calculate the number and advertise the results in its favor if the percentage of workers that have relocated to other local companies or that have taken the training is considerable.
Another evaluation measure would be the image created by GeneOne in the eyes of the public. This can be tested by surveys. The same can be done in Wall Street to see the perception that investors have for the company.
Conclusion
In conclusion, I might say that GeneOne has to make some difficult decisions.
The new market era has led companies all over the world to reshape their structures and change their policies time after time. Competition has become fiercer and this has raised new ethical and moral issues regarding the relationship between business and the people who both work for the business, or this late serve.
By making a mixture of management staff members and workforce treatment, GeneOne is trying to remain both loyal and positive toward its local workforce, retain its creative members and not forget its purpose of benefitting its shareholders. For this reason, it has drafted a plan that has all the capabilities of attaining positive results for both the company (its stakeholders) its young talented professionals and the workforce.
References
Stroup, J. (2008). Organizational leadership. The Managing leadership On-Line journal. Web.
Miller, K. (2006). Organizational Communication: Approaches and Processes. 4th edition. McGraw-Hill Company: London & New York.
Simon, H. (2006). Administrative Behavior. 4th edition. Blackwell Publishing: London.
Gomez-Mejia, Luis R.; David B. Balkin and Robert L. Cardy (2008). Management: People, Performance, Change. 3rd edition. New York: McGraw-Hill.
Zbigniew Chlondowski. (2007) “S.M.A.R.T. Site: attributes reference table“. S.M.A.R.T. Linux. Web.
Sullivan, Arthur; Steven M. Sheffrin (2003). Economics: Principles in action. Upper Saddle River, New Jersey; Pearson Prentice Hall.
Table 1. Issue and Opportunity Identification.
Table 2. Stakeholder Perspectives.
[Click twice on table to change, see instructions on next page. The alternatives and their ratings as well as the goals and their weightings shown below are for illustrative purposes, you should enter your own. Delete this paragraph when done.]
Table 4. Risk Assessment and Mitigation Techniques.
Table 5. Optimal Solution Implementation Plan.
Table 6. Evaluation of Results.